Massachusetts Marijuana Social Consumption Establishment License

What Is a Marijuana Social Consumption Establishment in Massachusetts?

In Massachusetts, a social consumption establishment is a marijuana establishment permitted to sell marijuana or marijuana products and allow customers to consume marijuana or marijuana products only on its premises.

Employees of social consumption facilities are only permitted to sell marijuana or marijuana products to individuals in quantities sufficient for on-site use. Consumers are not allowed to buy more than 20 milligrams of delta-9-tetrahydrocannabinol each day. If the appropriate licenses and permissions have been obtained, a social consumption establishment may offer pre-packaged, shelf-stable, and non-edible food and drink products.

Note that marijuana social consumption businesses are not permitted to sell or permit the use of alcoholic or tobacco products on their premises. Individuals under the age of 21 are not allowed to enter the premises of a social consumption business.

Does Massachusetts License Social Consumption Establishments?

According to the Adult Use of Marijuana Regulations (935 CMR 500.000), individuals or organizations wishing to open a marijuana consumption establishment in Massachusetts must acquire social consumption establishment licenses. For a period of 36 months from the date the first social consumption establishment receives a notice to commence operations, social consumption establishment licenses will be limited exclusively to businesses controlled by, and with majority ownership comprising, Social Equity Program Participants and Economic Empowerment Priority Applicants. However, as of 2023, Massachusetts has not issued this license or allowed the establishment of cannabis lounges and marijuana cafes.

How to Apply for a Marijuana Social Consumption Establishment License in Massachusetts

Before beginning full operations, social consumption establishments seeking to enter the cannabis market as licensees must complete multiple stages. To become a licensee, the first step is to submit the application fee and all three parts of the application in one package. These are referred to as the Application of Intent (AOI), the Background Check, and the Management and Operations Profile.

Each section requires applicants to provide accurate information about the marijuana business, its employees, and any other entities associated with the business and demonstrate an understanding of the Cannabis Control Commission regulations applicable to the applicant's license type, licensure, and scale.

To apply for a social consumption establishment license, visit the Massachusetts Cannabis Industry Portal (MassCIP).

APPLICATION OF INTENT (AOI) SECTION

This section summarizes the necessary criteria and information and provides guidance on complying with the CCC's rules.

• Required Individuals and Entities: The applicant must name persons or organizations with direct or indirect control over the social consumption establishment. One or more of the following conditions must be fulfilled by such persons:
  • An owner who has a financial stake in the social consumption establishment in the form of equity of 10% or more.
  • A person or organization with a voting stake of 10% or more in the marijuana establishment or the ability to veto important occurrences.
  • An associate
  • A person or entity that has the right to control, through contract or otherwise, or authority, including but not limited to:
    • making decisions about operations and strategic planning, capital allocations, acquisitions, and divestments
    • appointing more than half of the directors
    • appointing or removing corporate-level officials;
    • making major production, marketing, and financial decisions
    • executing significant or exclusive contracts
    • earning more than 10% of the dividends or at least 10% of the profits
  • a court appointee
  • a third-party technology provider with a financial interest in a delivery licensee
• Disclosure of In-State Interests: Applicants must disclose if any persons or organizations listed in the application have been disclosed in any previous Marijuana Establishment (ME) or Marijuana Treatment Center (MTC) license application or are associated with any other active license. \ The disclosure should contain any current information that is known to be accurate and truthful. This content should not be deceptive, misleading, untrue, or fraudulent, nor should it include any information that may deceive or create a false impression.
• Disclosure of Out-of-State Interests: Applicants must disclose if any individual or organization listed on their applications has had or currently has marijuana-related business interests in other states, as well as provide evidence of such interests. They should use their discretion in assessing if they have any other business interests relevant to their application. \ This section may require the submission of a business license, articles of organization, bylaws, operating agreements, or an affidavit attesting to the disclosure's validity and sincerity.
• Capital Resources: Applicants must disclose the amounts and sources of capital available to them from each individual or organization that contributes capital to the establishment's creation or operation. Capital may be in loans (financial, real, or personal property) or equity interests. \ Along with the disclosure, the applicant must submit proof of the capital's existence, which may include, but is not limited to, a bank or financial institution record dated within 60 days of the date of application submission. Any written loan agreement must also be provided if a person or organization contributes money in return for loan repayment. \ If the individual or entity supplying capital resources is also a direct or indirect control person or entity, they must be named in the appropriate section. After making these disclosures and submitting this information, the applicant must certify that the funds used to invest in or finance the establishment was lawfully earned or obtained, which may be shown via an affidavit or notarized document.
• Bond or Escrow: All applicants must put aside a sum of money adequate to fund the dismantling and winding down of the marijuana social consumption establishment, either via a bond or an escrow account. The sum put aside must be sufficient to cover the expense of paying any outstanding state or local sales tax obligations, the cost of securing the licensee's premises, and the cost of destroying the licensee's inventory of marijuana and marijuana products.
• Property Identification and Interest Documentation: Each applicant must specify the intended location of their marijuana business. Following the identification of the proposed location(s) for operations, the applicant must provide proof of property interest, which may include one or more of the following:
  • a clear legal title to the proposed site
  • a legally binding agreement authorizing the transfer of such title; or
  • an option to purchase the site
  • documentation from the owner as evidence permitting the use of the premises
• Host Community Agreement Certification: A one-page certification signed by the contracting authority of the host community and the applicant attesting to the completion of a Host Community Agreement is required. To operate several sites, each must have its own certification form that satisfies the above requirements. The Commission's website contains additional information on the laws governing Host Community Agreements.
• Community Outreach Meeting Attestation and Documentation: The Community Outreach Meeting aims to inform and educate the local community about the planned establishment. The Community Outreach Meeting is highly recommended since it will help design and inform the Host Community Agreement. Each applicant must have a Community Outreach Meeting that satisfies the Cannabis Control Commission's requirements.
• Plan to Remain Compliant with Local Ordinances: Each applicant must describe the plans to guarantee that the social consumption establishment complies with all local rules, ordinances, and bylaws, including but not limited to those regulating the sale of adult-use marijuana or medical marijuana. Applicants must also provide the following information in their proposal:
  • Identification of the prospective address's zoning district
  • Identification of any necessary permits and Identification of the time and frequency of the renewals of the permits.
• Plan to Positively Impact Disproportionately Harmed People: An applicant must submit this Plan which is required to be designed to positively impact the following groups of disproportionately harmed people as identified by the CCC:
  • Residents in places classified as "areas of disproportionate effect," as defined by the CCC and described in its Guidance for Identifying Areas of Disproportionate Impact. The classification of these regions will be reviewed regularly.
  • Economic Empowerment Priority candidates as determined by the Commission
  • Participants in the Commission-designated Social Equity Program
  • Residents of Massachusetts with a history of drug convictions
  • Residents of Massachusetts with drug-conviction parents or spouse

BACKGROUND CHECK SECTION

The applicant must include all relevant persons and organizations and any background disclosures and permission documents in this section. Each person or organization mentioned in the AOI section must also be included in the Background Check section. Individuals and organizations will be subjected to a thorough background check, and individuals will be fingerprinted.

• Background Check Information: The Commission is obliged to decide on the suitability of each person and organization mentioned on an application for licensing, which is based in part on the results of background checks. Background checks will include the following, but will not be limited to:
  • Records from Massachusetts and national crime databases
  • Civil database records for Massachusetts and the United States, including professional and occupational records
  • Other marijuana-related enterprises in which the person or organization is involved
  • Any action taken against the person or entity's license or registration
• Each person and organization named on the application must disclose actions in Massachusetts or another state. Applicants are not obliged to disclose any convictions that have been sealed or erased according to a court order.
• Background Authorization Forms: A background check is required of all individuals involved with an application. The Commission's third-party vendor conducts background checks. The applicant must provide three permission papers and an unexpired government-issued photo identification card for each person mentioned on the application for the vendor to obtain the required information. These papers include the CORI Acknowledgement Form, the Disclosure and Acknowledgement Form, and the Release Authorization Form.

MANAGEMENT AND OPERATIONS PROFILE SECTION

This section offers a glimpse of the applicants' strategy for running the Commission's social consumption establishment. The information needed in this section demonstrates that the applicant understands the legal requirements for doing business, including the Commission's rules, and that the applicant has plans that are unique to the license type, location, and size of the establishment, and will be allowed to operate legally.

• Business Information, Articles of Organization, and Bylaws: The applicant must prove that the establishment is registered to do business in the state. Acceptable proofs include:
  • Business name
  • Articles of Organization
  • Massachusetts Business Identification number
  • Doing-business-as-names
  • Bylaws
• Certificates of Good Standing: All candidates must present certifications of good standing from the State Secretary of Massachusetts, the Department of Revenue, and the Department of Unemployment Assistance. All certificates must be dated within 90 days of the date of submission of the licensing application. \ Note that the applicant must have workers in order to register with the Department of Unemployment Assistance and obtain a certificate of good standing. If an applicant does not have any staff, an attestation to that effect will be accepted in place of the Department of Unemployment Assistance's certification of good standing.
• Business Plan, Liability Insurance Plan, & Proposed Timeline: All applications must provide insurance plans, projected timeframes for attaining operations, and a comprehensive business plan for the establishment's operation. Revenue and cost forecasts, a business overview, and an operational plan are all examples of information that may be included in the plan. \ Although insurance policies are not needed until licensing, applicants must show in their plans that they will acquire policies covering general liability and product liability for a minimum of $1 million per occurrence and $2 million in aggregate yearly once licensed. Each policy's deductible cannot exceed $5,000 per incident.
• Summary of Operating Plans, Policies, and Procedures: The applicant must submit some plans, policies, and procedures related to the operating of the marijuana establishment. These documents must be precisely drafted to comply with the CCC's regulations and guidance documents. These documentations include:
  • Security Plan
  • Prevention of Diversion Plan
  • Storage Plan
  • Transportation Plan
  • Inventory Plan
  • Quality Control and Testing Procedures
  • Personnel Policies
  • Recordkeeping Procedures
  • Maintenance of Financial Records
  • Detailed Description of Qualifications and Intended Training Events for Agents
  • Energy Compliance Plan
• Diversity Plan: Social consumption establishment license applicants must present a Diversity Plan as part of their Management and Operations Profile. Diversity plans must be developed to promote equity in the establishment's operation for people of color, especially Black, African American, Hispanic, Latinx, and Indigenous people; women, veterans, individuals with disabilities, and LGBTQ+ people. \ Note that this plan is a distinct requirement separate from the Plan to Positively Impact Disproportionately Harmed People. This plan must show the goals, programs, and measurements that the marijuana establishment will pursue once provisionally licensed. All goals should be quantifiable and measurable.

Applicants seeking licensing for social consumption establishments must provide the following plans, policies, and procedures in their applications:

• A plan to prevent consumers from bringing marijuana and marijuana products onto the premises
• Procedures for disposing of unsold and unconsumed marijuana products
• Procedures to ensure that consumers are not overserved
• Procedures to educate consumers about the risk of impairment and the penalties for operating while impaired
• Operational strategy to guarantee the establishment is attentive in assisting disabled clients in locating modes of transportation and is customized to the marijuana establishment’s geographical area
• If vaporization or other non-smoking heat-based modes of consumption are allowed inside, blueprints and construction plans must include the following:
  • Heat-related consumption occurs in a separate area from other areas, separated by walls and a secure door with access restricted to the marijuana establishment
  • Employees have access to a smoke-free, vapor-free area
  • A ventilation system that directs smoke vapor from the consumption area to the outside of the building via a filtration system capable of removing vapor, consistent with all applicable building codes.
• Procedures to ensure no sales occur within the consumption area
• Procedures to ensure employees monitor consumption from a smoke-free, vapor-free area, including, but not limited to, an employee monitoring the exit of the marijuana establishment
• Procedures to ensure smoking is prohibited indoors, as defined by M.G.L. c. 270 22
• Procedures to ensure sanitary practices comply with 105 CMR 590 are used

Upon receipt of your application, the Cannabis Control Commission will review it for compliance with its regulations. If any portion of the application is found to violate the Commission's regulations, the applicant will be sent an RFI (Request for Information). A defect or non-compliance notice will include a brief narrative describing the problem.

Any errors and non-compliance problems must be corrected before resubmitting the license application or relevant portion. The Commission will immediately review the re-submitted material. Otherwise, a second RFI notice will be issued after a supplementary examination if the application is not determined to be consistent with the Commission's rules.

An application is queued for evaluation based on the date and time it was submitted and the application type (priority, expedited, or general). Following evaluation, the applicant will be informed whether the CCC approves the application. The notice will state:

• Instructions on payment procedures for the required background checks
• Instructions on the fingerprinting process for all relevant persons connected to the establishment
• Notification that the application has been filed to the municipality (where the establishment will be located), requesting a response within 60 days.
• Notification that the temporary license application will be reviewed in 90 days

A provisional license will be recommended as long as the applicant and the relevant authorities provide the required information. For more information on the social consumption establishment licensure, download and review the CCC Adult-Use of Marijuana Regulations or contact the Cannabis Control Commission at (774) 415-0200 or Commission@CCCMass.com.

How Much Does a Marijuana Social Consumption Establishment License Cost in Massachusetts?

A social consumption establishment license fee costs $10,000. Before a license is granted, the applicant must also pay a license application fee of $1,500. Except where expressly permitted, payments are non-refundable and cannot be waived.

Can Marijuana Social Consumption Establishment Licensees Hold Other Cannabis Licenses in Massachusetts?

According to the Massachusetts Guide on Cannabis Licensure, no person or entity having direct or indirect control in a social consumption establishment license may be granted more than three such licenses.

For other cannabis licenses, licenses will be limited to businesses controlled by and with majority ownership by Economic Empowerment Priority Applicants or Social Equity Program Participants; microbusinesses; and craft marijuana cooperatives, for a period of 36 months from the date the first social consumption establishment receives a notice to begin operations.